Letter Carriers Say UPU Pullout Harms USPS, Helps Private Carriers

The National Association of Letter Carriers (NALC) questions the motive behind the US decision to withdraw from the Universal Postal Union (UPU) over inbound postal rates from China, and it says diplomacy works better than threats.

The NALC, which represents USPS city delivery letter carriers, claims the State Department’s UPU strategy serves the interests of large private companies such as UPS and FedEx, which it says are targeting the Postal Service’s $2.7 billion in international mail revenue.

NALC statement follows:

NALC Opposes State Department Decision to Leave UPU
The U.S. State Department’s announced last week that the U.S. will withdraw from the Universal Postal Union (UPU) after a special meeting of the UPU failed to adopt pricing policies (so-called terminal dues) advocated by the United States at the urging of private delivery companies (i.e., UPS and FedEx). The proposals were outlined in an August 2018 Memorandum (link https://www.whitehouse.gov/presidential-actions/presidential-memorandum-secretary-state-secretary-treasury-secretary-homeland-security-postmaster-general-chairman-postal-regulatory-commission/), just a few weeks before the September 2018 meeting of the 192-nation UPU in Ethiopia. The private companies have complained that the UPU terminal dues rules results in business going to the USPS by offering below-cost delivery to the U.S. – especially from China.

NALC opposes the decision to withdrawal from the UPU – the problems identified by the August memorandum are best solved through multilateral diplomacy. Leaving the UPU could have unintended negative consequences on American citizens and businesses and hurt the Postal Service financially. This is certainly what is driving the private shippers, which are targeting the Postal Service’s $2.7 billion in international mail revenue.

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Background
The UPU was already moving forward with measures to eliminate the U.S. Postal Service’s losses on inbound small packages resulting from the terminal dues system. (Terminal dues are the fees postal operators pay each other to deliver international letters and small packages.) Based on changes adopted by the last UPU Congress in 2016, China’s country status was already changed (it was removed from the poorest developing country status that had allowed it to pay the lowest rates in the past) and a series of terminal dues increases on e-packets (small parcels) were implemented — rates are increasing 13% annually starting in 2019 and continuing through 2021. The goal is to eliminate any Postal Service losses on inbound international mail that unfairly subsidizes overseas sellers.

A uniform system of terminal dues – like that provided by the UPU — serves to promote universal service in the same way that uniform domestic postage rates benefit all Americans, rural and urban alike. Terminal dues make possible the benefits of universal service on a global scale.

The UPU is the United Nations agency that allows 192 countries to provide universal postal services worldwide. It allows Americans living overseas to send letters and packages back home and for their families to reach them at affordable rates. It provides the infrastructure for the transport and exchange of letters, e-packets and packages that benefits all Americans and their businesses – including payment systems, automated processing systems and advanced electronic data (AED) for customs officials.

Pulling out of the UPU would deny ourselves access to this infrastructure and threaten the world’s invaluable system of universal postal services. This would raise costs for consumers and reduce access for millions of American families with overseas ties – and have unpredictable impacts on international mailers. For that reason, the International Mailers Advisory Group, a trade association of international shippers, also opposes exiting the UPU.

Although the State Department announcement indicated a willingness to rescind the withdrawal if bilateral and multilateral negotiations succeed, making a threat to leave makes the success of those negotiations unlikely. Threats are not conducive to diplomacy.

It is not practical to negotiate bilateral agreements with 191 other countries – and it certainly cannot be done within a year. It makes much more sense to go to the next UPU Congress in 2020 and continue to pursue our goals on a multilateral basis in a way that will preserve universal service.

Staying in the UPU gives us the mechanism and leverage to continue the progress made in 2016, which included the adoption of an integrated product plan that is being used to fight the international shipment of opioids with the transfer of AED (advanced electronic data) technology to developing country postal operators. Increasing the provision of AED on international shipments is part of our government’s plan, as required by the recently adopted STOP Act, to combat the importation of illicit opioids into the United States.

Sadly, this UPU policy, and the August memorandum that proceeded it, was developed to serve the interests of large private companies such as UPS and FedEx. It emerged from the White House Domestic Policy Council and was hidden from public view. Neither the August memorandum nor last week’s announcement was presented to the Advisory Committee of the International Postal and Delivery Services (IPoDS) by the State Department — as intended by law. In fact, the IPoDS has not met since November 2017.

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

Union is more concerned with the lose of the packages than the cost to the american taxpayer. Maybe if we were to get rid of this crazy Epacket their might be some layoffs of postal workers. Hard to justify Epackets

I’m surprised they didn’t also claim this will hamper the fight against terrorism and increase global warming. Simple free market principles should govern rather than these labyrinthine organizations and regulations. If China wants to keep their populace occupied with commercial as opposed to political activity, they’re free to subsidize it with their own yen, which they have plenty of.

So, let me get this right, the USPS cannot compete with private carriers, if it does not subsidize Chinese shipping to the US? Seems to me to be a management issue and a business model issue with the USPS. Why should Americans subsidize a BLOATED government institution? I work for the USPS and for an American to ship to China (retail), it costs MINIMALLY $24.00 and goes up from there depending on the weight and dimensional size of the box. So, it makes it very expensive for US companies to ship to China….. I don’t see the USPS (or it’s union) doing ANYTHING (except bleeding Americans dry in shipping) to reduce the prices for Americans to ship to China?? All this garbage about citizens not being able to ship to their families is JUST HOGWASH. A Chinese gentleman came to me at the post office to ship a baby stroller to China (to his family) and when he found out it would be $123, he decided to not ship it because it was too expensive. Apparently, all they care about is Chinese citizens shipping to families in the US and not the other way around.

Furthermore, the treaty is for DEVELOPING NATIONS…..like Ethiopia. China is far from a developing nation these days. China owns a 1/3 of our national debt, is growing at an annual rate of 6.7% (compared to the US 3.3% rate) and developing a much larger middle class consumer base than the US. So, exactly why do they qualify for the subsidize rate? They are not a “poor nation that is developing”, which is WHY the treaty does subsidize rates? The USPS’ union (and the USPS by extension) argument in no argument at all. It just sounds like a lot of whining. because the USPS can’t compete with private carriers, due to over bloating of it’s legacy costs, subsidizing rates to China and making private corporate deals at subsidized rates for corporate giants. Meanwhile, it is us (regular Joe’s paying the piper) paying for all of this……just remember when rates go up in January (it is not that the cost has really gone up, but rather it is because all the subsidizing done for other countries, corporate giants (like Amazon) and to disguise a very bad business model.

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